Reality Check

Priceline Keeps Climbing

The tireless upward march of Priceline's shares has had me quite puzzled. Several times over the last few weeks I was tempted to take a short position on Priceline only to be scared away by its upward momentum. There have been a number of negative opinions on Priceline, mostly based on evaluation. Here's one from March 5 that recommended Apr 2010 $620 put options. I agreed with the premise of the author but the market hasn't and those contracts are now worth less that 10% of what they were back then.

There are analyst predictions of Priceline's share price hitting $800 or $1,000 soon and some people even have it in a race with Apple (News - Alert) to see which one crosses $1,000 first. Of course the comparison is ludicrous. Apple's market cap dwarfs that of Priceline by 16 to 1.

The stock seems to be taking a breather now but after the furious run up, Priceline is certainly due for a considerable correction soon. When and how much? Wouldn't we all like to know?